The Charity Commission, Cage, the High Court and the revealing emails

19 November 2015

Internal Charity Commission emails were disclosed in a High Court judicial review brought by the advocacy body Cage. Stephen Cook looks through them

High Court

In the wake of a press conference by the controversial advocacy group Cage, the barrister Orlando Fraser QC, a board member of the Charity Commission, sent an email to colleagues: he was outraged that Cage had revealed it had in the past advised the suspected Isis executioner known as Jihadi John, now believed killed by a drone strike.

"I don't know what anybody else thinks, but discovering that Cage has trained Jihadi John (or 'mentored' him, as they put it) makes me think that we have to put the spotlight on the Rowntree Foundation to look at their reputational risk processes in supporting this dangerous organisation. The risk for the sector's reputation is too great to take no action - can we urgently consider putting the RF's action in this regard into statutory inquiry?"

Fraser (left) was in fact referring to the Rowntree Foundation's sister charity, the Joseph Rowntree Charitable Trust, which had awarded £305,000 to Cage, of which £271,250 was paid, the last tranche in January 2014. The commission had opened a compliance case - which does not involve the use of statutory powers - in December 2013, and had informed the trust in November last year that its inquiries were complete.

Fraser's email went to Paula Sussex, the commission's chief executive, and Michelle Russell, its director of investigations, monitoring and enforcement, with a copy to William Shawcross, the chair, and Peter Clarke, another board member, who is a former head of the anti-terrorist branch at the Metropolitan Police. The first to reply was Shawcross, who was in Washington. "I completely agree," he wrote. "I just saw this online in the US. It is appalling, and Orlando is quite right."

For three days from 27 February to 1 March, the flurry of emails continued, with Fraser in particular continuing to press for robust action and Russell appearing to take a more cautious approach, drawing attention to the investigations of the charity the commission had already carried out. Shawcross, a writer and journalist, supported Fraser, circulated newspaper articles critical of Cage and the JRCT and referred to Cage as a "jihadist front" - a claim Cage denies.

In the event, the commission did not follow Fraser's calls for a statutory inquiry. But the decision taken instead to demand an undertaking, which the JRCT gave under what it called "intense and unprecedented regulatory pressure", that it would never fund Cage again led to a High Court case in which the emails were disclosed.

I think we need to find out more from JF/JR about both the historical situation and the present situation, in light of the revelations that Jihadi John was supported by Cage for many years, and that Cage's director has been an avowed jihadist, and then JJ's ghastly activities

Orlando Fraser

Cage, with the JRCT as an interested party, obtained a judicial review at which the commission conceded that it could not insist on such an undertaking from the charity under the advisory function it said it had been exercising.

But the emails provide an unprecedented insight into the willingness of some commission board members to express forceful opinions on the work of the executive. The National Audit Office, in its follow-up report on the work of the commission in January this year, said: "There is a risk that the board's continuing involvement in executive matters for an extended period could limit its independence and ability to hold the executive to account effectively."

The emails also indicate an intense focus on charities and suspected terrorism, an almost contemptuous attitude towards the JRCT - "do they even realise they are a charity?" wrote Fraser at one point - and a propensity to equate the commission's statutory duty of increasing public trust and confidence in charities with intervention in an individual charity.

The Charity Commission declines to comment on the emails, so Third Sector has been unable to check the meaning of some unclear phrases or confusing initials, which have therefore been reproduced as written.

More cautious tone

The more cautious tone taken by Russell (right) is apparent in her response to the first emails by Fraser and Shawcross. She said she had already talked to Clarke about the matter and went on: "From a regulatory perspective, we need to take care to separate out historic support already dealt with from any comments or actions by any charity now, for which recent comments and events will clearly affect reputation, trustee duties and more any charity's links or associations with Cage.

How a judicial review unfettered the JRCT

The judicial review of the actions of the Charity Commission over the funding of Cage by the Joseph Rowntree Charitable Trust had the effect of releasing the charity from an undertaking that it would never fund Cage again.

When the judicial review was withdrawn after one day in the High Court, it was on the basis of a statement by the commission that "there is no obligation on the trustees of JRCT to fetter the proper and lawful exercise of their discretion in future".

On the day the case began, the commission issued a statement saying that it had in March "secured assurances that the charities were not funding Cage and in the current circumstances had no future intention of doing so".

The commission argued in court that this wording meant the undertaking was not for all time - only for as long as "current circumstances" lasted - and its demands from JRCT had been advice and guidance only.

But the two judges pointed out that the phrase "current circumstances" was not used in a press notice or in a letter to a minister. They argued that the press notice had to be regarded as the definitive statement of the position and asked the parties to draw up an agreed clarificatory statement.

This said: "Trustees must be free to exercise their fiduciary powers and duties in light of the circumstances that exist at the time ... The commission does not seek to fetter charities' exercise of discretion whether to fund the charitable activities of Cage for all time, irrespective of changed circumstances.

"The commission recognises it has no power to require trustees to fetter the future exercise of their fiduciary powers under its general powers to give advice and guidance. In consequence, there is no obligation on the trustees of JRCT to fetter the proper and lawful exercise of their discretion in future."

After the case a commission statement said: "It has always been clear that trustees have the right to exercise their discretion when acting exclusively in the best interests of their charity and within their objects and powers."

"Any current suggested support needs to be checked and verified; I have not seen any current live support in press from Joseph Rowntree or the Roddick Foundation (if I have missed this please let me know)." She added that the final reports on the earlier compliance cases the commission had opened on the JRCT and the Roddick Foundation, which had also given money to Cage in earlier years, were due shortly.

Fraser responded that any connection between Cage and a charity, both past and present, must be seen as potentially toxic for that charity, "with dreadful repercussions on reputation etc, and we must be quick to reduce the damage to the sector by being seen to control it effectively.

"I think we need to find out more from JF/JR about both the historical situation and the present situation, in light of the revelations that Jihadi John was supported by Cage for many years, and that Cage's director has been an avowed jihadist, and then JJ's ghastly activities.

"As regards the historical situation, this is obviously of relevance if it transpires that RF or JR was funding the lifestyle of JJ through Cage's 'mentoring' programme, if Cage is run by a jihadist, and JJ then went on to behead a number of innocent people, including a UK charity worker. Charity and taxpayer funds (through Gift Aid) financing JJ is such a terrible picture that I don't need to sketch it out.

"Indeed, it is such a terrible picture for a charity that I think we need to know how much JR/JF knew about all this, and why they have not been in breach of their duties of prudence in supporting Cage - prima facie they have, and we would wish to see firm action against such trustees, unless a pretty good explanation is forthcoming.

"As regards the ongoing situation, we obviously need information from them to satisfy us that they are not supporting Cage in this manner. Either way, is not a statutory inquiry regarding JR/JRF a good forum for doing this, as well as sending out a strong message about involvement with such groups?

"I bow to you experts about this, but my own feeling is that a strong message needs to be sent now, before people wrongly conclude that the Charity Commission is not bothered whether charity and taxpayer funds were being used to support the world's most gruesome psychopath. Call me old-fashioned etc." (Cage's research director, Asim Qureshi, and its legal director, Dr Adnan Siddiqui, deny being jihadists.)

'It has not been easy'

Russell responded: "I do see and can understand the concerns and handling issues." Within half an hour Fraser came back: "Don't get me wrong - I have ZERO concerns about how it has been handled so far. I have known pretty much all you have done on Cage/JR for 6 months and approved - it has not been easy and I have understood and accepted your wish to follow the technical route until more turned up.

"However, the new information this week ... requires a step change in approach to the robust (which the public will understand) and away from the technical (which they will not).

"To be ahead of the inevitably horrible curve next week, and in order not to look complacent, I would strongly recommend the opening of an urgent Watchtower-type look-see statutory inquiry into whether JR funding ended up supporting JJ, and if so, what JR knew about it; and if nothing, why not; and if negligence or worse is shown, then actions for breach of trust are taken. It could also look more broadly as to what control JR had at all over this funding of Cage - and steps taken to mitigate the risks associated with it.

"If they fight, so be it - it won't be the worst thing to have to defend, and I suspect that they will in fact wish to be seen to cooperate. This is the form of robust regulation we have been talking about - legally (maybe) open to challenge, but fundamentally necessary, in the sector's interest, heart in the right place, and would be 100 per cent supported by the public. In these circumstances you would have this board member's support (and the others)."

(Fraser's reference to Watchtower concerns a statutory inquiry into the Watch Tower Bible and Tract Society of Britain - the HQ of the Jehovah's Witnesses - which is being challenged in the Court of Appeal on the alleged grounds that it is a "fishing expedition".)

Within minutes Shawcross (left) responded: "Orlando is not old-fashioned. He is absolutely right. Any association by any charity or funder with such a terrorist-supporting group as Cage is intolerable and we must demand a full explanation at once, as Orlando proposes. Having spent the last 24 hours in Washington meeting with senior US government counter-terrorism officials and analysts, it is even more clear to me that the threat of ISIL is growing at a frightening rate in many places.

"One senior analyst also thought it was astonishing that Cage was not long ago exposed for what it is - a jihadist front. We must be robust and, where possible, be seen to be robust, to protect the reputation of the sector as well as ourselves."

'Do they even realise they are a charity?'

The next day Fraser wrote: " I see from today's Times that a spokesman for JRF thought fit to say that, although the charity condemns violence (how big of them), the Cage press conference raised a lot of legitimate questions about the security services. Do they even realise they are a charity? Their judgment is woeful, but it may be worse if they are complicit with Cage on a continued basis. I would ask you to send the inspectors in next week to investigate the extent of their past and present links."

Shawcross then circulated an email sent to him earlier by Michael Burleigh, author of Blood and Rage: a Cultural History of Terrorism and Sacred Causes: Religion and Politics from the European Dictators to Al Qaeda. Burleigh's email had a link to a Daily Mail article about the JRCT and Cage, referring to a 2006 video of Qureshi urging a crowd to "support the jihad of our brothers and sisters" in countries "facing the oppression of the West".

Burleigh wrote: "Shall we say my shadow was involved in this excellent piece? I hope, de minimis, that you are going to summon the heads of Amnesty and Rowntree for a lively discussion about why they are funding a front for jihadist terrorism." Shawcross added: "It is indeed an excellent article."

The following day, Sunday 1 March, another board member - the academic Gwythian Prins, who first used the phrase about how charities should "stick to their knitting" - intervened to agree with the proposal for a statutory inquiry: "It is time for the commission to take the initiative where we have standing to do so - quietly and very firmly. I would encourage a meeting with both key directorate staff, Michelle and Kenneth (Dibble, head of legal services) and relevant board members present, calling in Amnesty (if they have actually funded directly) but most certainly Rowntree and Roddick Foundation, to explain themselves ... I think this should happen next week and the fact we are calling them in should become public."

Russell then circulated the draft of a letter to the JRCT asking it for more information about any new or contemplated links with Cage, and whether the charity had asked Cage if any JRCT funding was spent on casework to support Mohammed Emwazi (right).

"Statements made last week by Cage, and the public reaction to them, raise clear questions for a charity considering funding its activities as to how they could comply with their legal duties as charity trustees," the draft said. "It would be difficult to envisage there not being significant reputational damage to any charity intending to fund the organisation now ... it is difficult to see how trustees of a charity could justify taking such risks and comply with the legal duties of prudence and protecting its assets and reputation."

Peter Clarke responded that the draft "seems pretty good to me. It does seem as if they are trying to distance themselves from some aspects of Cage's work, but maintain that their position as funders is justified because Cage have raised what they consider to be legitimate concerns around the actions of the Security Service.

"Is it legitimate for a donating trust to pick and choose in this way? It seems strange to me that a charity could seek to justify donations to a largely odious organisation by saying that one small part of its work might be claimed to be charitable."

At this point Shawcross circulated a "compelling" Daily Telegraph article by Andrew Gilligan about Cage: "Surely there can be no justification for any charity to fund this organisation? I know we have already engaged with Rowntree and Roddick. I understand that we have not published a report because one of them did not reply to us, probably because of the delaying tactics employed by its aggressive solicitors. This means that we may now look as if we are on the back foot. Nonetheless, I think we must act.

"This is a matter of national significance and the charities involved have not been adequately forthcoming. They have said in the past that they supported Cage because it was a human rights organisation. I think that argument would now be much harder to sustain. See the Gilligan article attached. Surely we can say that any charity supporting Cage has clearly not done due diligence and has put its own reputation and that of the sector at risk? We must not be knee-jerk, but I agree with Orlando that we have a wider responsibility here. Charities surely cannot fund bodies that are acting against the national interest."

This drew an apparently terse response from Russell: "Please don't worry. We have this in hand. Please leave it with me. I have been in close contact with Peter on this and am due to tel con Peter and Orlando tomorrow." Shawcross then arranged to telephone Russell, and the remaining emails dealt with setting up the telephone conference on 2 March and responses to press queries.

Only emails by board members until 1 March have been disclosed, apparently because they were the only ones referenced in commission witness statements. So the role of board members from then on, and in the letter the commission sent to the JRCT after the telephone conference on 2 March, remains unclear. This letter, disclosed to the court along with other correspondence between the regulator and the charity, was stronger than the draft in Russell's email of 1 March.

The added elements were a warning that if the charity did not give satisfactory assurances about future funding, the commission "will need to consider what further regulatory action it needs to take to assure that public trust and confidence is not eroded by this issue". It added any breach of duty in taking unjustified risks in its funding decisions "may well expose the trustees to personal liability".

The disclosed emails were mentioned, but not read out or discussed, in the judicial review, which centred on whether the pressure on the charity was an order (which its adversaries said it had no power to make) or just advice and guidance. In the event, the review was withdrawn on the basis of a statement by the commission that it had no power under its advisory functions to fetter the discretion of trustees for all time (see "How a judicial review unfettered the JRCT").

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